Budget, stress testing, stabilization fund on NCUA agenda

JULY 22, 2015 -- Mid-year budget reprogramming, capital planning and stress testing and a “corporate stabilization fund assessment” are among the items on the agenda for the NCUA Board to tackle Thursday in its regular meeting. The board meets at 10 a.m. in Alexandria, Va.

NASCUS commented on the stress testing rule proposal in March, noting that the association supported proposed changes to the rule, agreeing the changes improve the capital planning and stress testing framework. However, NASCUS also urged the agency to consider several other changes and clarifications to better refine the regulation. Among the changes:

Recommended the agency consider adding a definition for “Capital policy” to further clarify the distinct, but integrated, nature of the Capital plan, the Capital policy, and the Capital planning process;

Urged the agency to reconsider whether it is providing enough time for a meaningful process of planning, and further consider restoring a five month capital planning window for covered credit unions;

Suggested that NCUA clarify the standards by which a covered credit union’s request to conduct stress tests itself will be evaluated. Further, NASCUS urged NCUA to “to clarify the role of the credit union’s board, or board committee” in the stress-test process, and require that the credit union board, or a board committee, formally approve the Capital policy, upon which the capital plan is based, and the independent requirement to approve the capital plan be withdrawn.

“At a minimum, NCUA should consider changes that facilitate a credit union director’s ability to identify and understand her compliance obligations,” NASCUS wrote.